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Presentation to Portfolio Committee

17 September 2010

Access to Market

The emerging producers in SA find it difficult to integrate into the formal supply chains

In addition to supplying the local markets, the producers are also finding it extremely difficult in entering the export markets

This is mainly due to lack of, Marketing infrastructure, Lack of market knowledge, pack houses, lack of volumes, Access to certification and little understanding of the highly sophisticated export environment.

Access to Market

In recognition of these challenges, the NAMC continues developing programmes that support the emerging producers with their endeavours to supply markets

locally and Internationally

The NAMC strive to increase market access for all market participants in particular the emerging producers.

Schemes The NAMC continued developing schemes with its industry partners

and other public institutions. The main purpose of the schemes are to uplift the black producers in

the agricultural sector and to encourage their integration into the commercial mainstream

The grain crop scheme is currently being implemented in North West by MGK Co-op and in Free State by OVK Co-op

The objective is to promote production and market access for grain for emerging farmers through, crop insurance, initial soil preparation, provision of better extension services and provision of temporary storage.

Number of black farmers are participating in the grain crop scheme, but due to financial constraints we are unable to upscale the scheme.

Schemes NAMC and role players within the wine industry completed

the design of the vineyard development scheme The scheme was designed to integrate the emerging producers

into the commercial mainstream of the wine industry Beneficiary of this scheme – emerging producers along the

orange river in Northern Cape (Upington) and Free State province

Emerging farmers produces grapes that are suited grape juice concentration and distilling wine

Wine cellars around the area have agreed to procure the products produced by the producers

Currently, assisting the existing producers to produce quality products

Schemes The NAMC is collaborating with the following institutions in

implementing the scheme

Free State Department of Agriculture OWK Northern Cape Department of Agriculture IDC Land Bank Department of Agriculture, Forestry and Fisheries GWK WineTech

TUGELA FERRY (MSINGA) IRRIGATION SCHEME FARMERS

This project is to link approximately 2000 small-scale farmers in the Tugela Ferry (Msinga) in KwaZulu-Natal.

These farmers have secure tenure to irrigated land that was part of scheme started many years ago.

The irrigation water is from the uThukela (Tugela) river. These farmers produce a variety of products, mainly tomatoes, green mealies and maize.

Over 1400 women and about 600 men

Red Meat Project Objective:

to increase income earned by developing farmers from raising cattle, through greater, more beneficial participation in formal and informal red meat markets

Activities: building farmers’ understanding of structure, operation, requirements of

formal markets broadening, deepening and reducing distance to markets in developing

farming areas by (re-)establishing auction pens; ‘custom feeding programmes’ (CFPs)/feedlots (farmers pay feed+veterinary costs)

(with EC Dept of Agric. and Rural Dev.) training, practical assistance to reshape herd age/gender/genetic composition in order to begin to increase calving rate/quality weaner production

surveys (planned) to assess impact of project on herd profiles, livestock marketing practices, income earned, etc.

Achievements: auctions: +/-R5m earned from sale of +/-1 650 animals on 50+ auctions since

2005; at most recent auction (Fort Cox College) 50% of animals on offer were weaners – 93% sold at average R14,06/kg (live)

Red Meat Project CFPs/feedlots: 3 operating (Mount Frere, Fort Cox, Ngqushwa); +/-350 animals

marketed since 2008; capacity 40-80 animals; demand to enter animals now greater than capacity; farmers in 22 local municipalities have asked for help to set up CFPs

ave. net carcass price at abattoirs +/-R3 700; ave. net informal market (live) price +/-R7 500 (mostly older, heavier animals);

estimated net increase in farmers’ earnings for animals prepared by CFPs: 15-20%

attractive marketing channels established for both weaners and older animals should gradually help increase calving rate, weaner marketing, income from livestock production

Way forward forming partnerships with long term provincial role-players (government,

private sector); integrating project’s activities into business plans, budgets of partners

transferring governance (but not management) to farmers stimulating local production of inputs (maize, lucerne, grass bales, etc.)

Export Programme In an attempt to assist the emerging producers with their

endeavours to export their products, The NAMC has partnered with local and international organisations

in an attempt to support these farmers. Emerging farmers that are export ready are trained on the

following topics Supply chain and logistics training, Contract negotiations training, Compliance (social codes, company codes, sector codes,

manufacturing codes and Generic codes) The purpose of this course is to prepare emerging farmers that are

export ready for the challenges that they have to face when entering an export market

The NAMC collaborated with an Agency of the Dutch government

Export Programme PPECB is also participating in the programme to assist fruit farmers

to comply with food safety standards, which is a prerequisite for export markets

Under this programme training on export quality standards was conducted to 50 producers

The training held for producers in Limpopo, Mpumalanga, Free State, Eastern Cape and Western Cape

The training was held in Limpopo (Tzaneen) and Eastern Cape (Port Elizabeth.

12 female and 38 male that are currently exporting through agents participated in the training programme.

Export Programme The NAMC in collaboration with an Agency of the United Nations

(ITC) are helping emerging farmers in Limpopo, Eastern Cape and Western Cape to improve the quality of their products for export market.

The project in Limpopo are the restitution farms in Levubu area involving communities around the area

In the Eastern Cape, the NAMC is supporting the citrus farmers in Fort Beaufort. Three females are involved and ten farmers are male

In the Western Cape, the NAMC is supporting deciduous fruit farmers in Ceres. All the producers are male.

The NAMC is also supporting a cooperative in the Northern Cape (Upington) that is exporting its raisins on a Fair Trade market to UK

The co-op has 15 females and 60 males

Training Programme Training was identified as one of the factors that contribute to lack

of access to markets by the emerging sector In responding to the training needs, the NAMC facilitate a number

of training programme for the producers in the past The objectives of these training course was to capacitate the black

producers to operate their businesses successfully A training course was sponsored which was attended by over 70 emerging

producers from 11 other African countries A training course tailor-made for women entrepreneurs was organised and

was attended by 38 women entrepreneurs representing all the provinces The NAMC will up scale the training programme to reach more

producers to assist them to improve their business operations so that they can contribute more positively to increasing exports and supply domestic markets.

Training Programme The NAMC collaborated with the following institutions on the

training programme

Department of Agriculture, Forestry and Fisheries, Buhle Farmers Academy Land Bank

Levy Income and Amount Spent on Transformation: 2009

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Industry Total amount of levy income

R

Amount spent on transformation

projectsR

% of total levy

income

Prescribed % of total

levies to be spent*

Difference

Citrus 28 377 458 3 456 187 12.2 10 2.2

Cotton 1 927 902 1 188 867 61.7 20 41.7

Dairy 29 622 451 4 713 923 15.9 20 (4.1)

Deciduous fruit 35 532 881 6 470 408 18.2 20 (1.8)

Dried fruit 1 869 855 434 910 23.3 20 3.3

Pork 13 459 122 2 042 994 15.2 20 (4.8)

Potatoes 22 181 627 4 764 494 22.2 20 2.2

Red meat 19 173 183 6 575 974 34.3 20 14.3

Sorghum 1 547 820 312 445 20.2 20 0.2

Table grapes 17 396 490 1 291 405 7.4 20 (12.6)

Wine 62 011 156 24 580 355 39.6 20 19.6

Winter cereal 30 296 604 6 000 193 19.8 20 (0.2)

TOTAL 263 396 549 61 832 155 23.5

ROLE AGRI-TRUSTS ON TRANSFORMATION

• Trusts with a 50/50 representation

Citrus, Deciduous Fruit, Maize, Meat and

Winter Cereal.

• Trust with only one ministerial trustee. Cotton, Lucerne, Oilseeds, Sorghum,

Wool and Mohair Trusts.

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CITRUS INDUSTRY TRUST

Funding

• Currently providing funding to 54 students –in 2010 (47

in 2009).

• Assist students to find internships and workplace

experience placements

• Assist students to find internships and workplace

experience placements

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CITRUS INDUSTRY TRUST cont.

•The BEE Bursary Support category focuses on emergent farmers.

•Students can be supported from as early as secondary school level.

•Study costs are subsidised with the enterprise contributing at least 50% of the total costs.

•Students may do their vacation work and internships

(where applicable) at the enterprise.

•Students are obligated to work for the enterprise on

completion of their studies.

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COTTON INDUSTRY TRUST

Small-scale cotton farmer development

1)Small-scale cotton farmer’s forum

The main function of the forum is to co-ordinate and monitor progress with regard to the set objectives of the Cotton Sector Strategy Plan and to provide an environment where positive interaction between role players could lead to increased market access for the small cotton farmer.

2) National small-scale cotton farmer co-ordinator

Its main task is to provide capacity to, and be a driving force within all provincial small cotton development committees by galvanising support from all role players in a structured environment that is conducive.

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DECIDUOUS FRUIT TRUST

•To increase the production footprint of emerging

producers (cluster & individual needs)Planting Project

•2008/09 – R1,5 mill (78 Ha) + R1,5 Mill (WCDA)

•2009/10 – R2,2 mill (110 Ha) + R4,9 mill (WCDA)

•+ R5,1 million CASP funds to be administered in 2010 Total = R12,2 mill

•1st Phase = 1,000 Ha by 2014 – 600 Ha in the Western Cape in partnership with WCDA.

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MEAT INDUSTRY TRUST• Started allocating bursaries at tertiary institutions in order to

further academic strength for South African post graduate students.

• Bursaries were to be awarded to for MSc and PhD studies in some aspects of Red Meat at a value of R50 000/annum for 2 years (MSc) and 3 years for PhD.

• The bursary started supporting 6 students in 2008 and for practical reasons it grew to 12 students per year at R600 000 in total

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OIL AND PROTEIN SEEDS TRUST Upliftment of emerging sunflower farmers, TEMO Agri Services/MGK.

The project focus on sunflower producers in the Bojanala District. 185 farmers benefited from the project in 2009/10 seasonR200 000 was allocated specifically for training courses attended by emerging farmers.

Farmer Development: Grain SA

•Focus on sunflower and groundnut producers in Free State & North West provinces.•The following were the main issues addressed by the programme:a)Trainingb)Communication-monthly newsletter (Pula/Imvula)

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MAIZE INDUSTRY TRUST

Types of Funding:

•On-Farm Trials

•Crop Production Training

•Training of Extension Staff

•Information Days and Interaction with Farmer Groups

•Financial Assistance: Soil Correction/ Production Risk/ Mentoring

COURSE TRAINEES(Annual)

Crop Production Course 20

Maize Production Short Course 15

Maize Production Short Course 15

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WINTER CEREAL TRUST

Grain SA

Grain Farmer Development Programme

•Creation and servicing of study groups

•Preparation of trial plots and presentation of

farmers’ days

•Training material and courses for farmers

•Communication through radio broadcasts and

written media

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WINTER CEREAL TRUST cont.

Bursary Scheme

•The Winter Cereal Trust annually makes bursaries

available to students studying industry related courses.

Bursaries are allocated in terms of the principle that at

least 50% of the bursaries had to be granted to

students from the PDI

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WOOL TRUST

Transformation programmes focuses on the following areas:

•The competitiveness and profitability of woolled sheep farming in communal areas

•Upgrade of shearing sheds in communal areas.

•Shearer training

•Shearer competitions

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MINISTERIAL TRUSTEE: CAPACITY BUILDING PROGRAMME1. KIND III CORPORATE GOVERNANCE

•Why governance is important,

•General definitions including standard definitions,

•Value of King III corporate governance

•Standards from ethics professional organisations

•Codes of conduct, conflict of interests, ethics policies etc.

MINISTERIAL TRUSTEE: CAPACITY BUILDING PROGRAMME cont.

2. INVESTMENT ANALYSIS

•Methods that can improve trusts returns on investments

•Understanding of Interests and inflation rates

•Financial forecasting techniques- enabled trustees to make truly informed investments decisions.

•Investments performance analysis

•Understanding different Investment Asset classes

•Understanding Inflation and interest rates